Shopify average order value (AOV) is the average amount a customer spends per order in your store. Shopify calculates it as gross sales minus discounts, divided by the number of orders, excluding any edits, exchanges or returns made after the order was placed.
Owning a Shopify store means tracking a lot of data to find the insights that improve performance. AOV is one of the most useful, because it tells you how much your customers spend each time they buy, and why AOV matters for ecommerce brands comes down to profitability: knowing where you stand is the first step to improving it.
In this guide, we’ll cover:
The standard AOV formula is simple:
AOV = Total revenue / Total number of orders
In Shopify, you can see “Total orders” as a default metric on your dashboard.
The screenshot also shows “Total sales”, which looks like the other half of the formula. Using those figures, the AOV for the day would be:
$82.99 / 4 = $20.75 AOV
So why does the same dashboard show this?
Here, Shopify reports an AOV of $36.23. The difference comes from how Shopify defines AOV.
Since January 2023, Shopify has calculated AOV as:
Shopify AOV = (Gross sales – Discounts) / Number of orders
Both gross sales and discounts exclude adjustments, which Shopify defines as any edits, exchanges or returns made to an order after it was created. Before that change, Shopify based AOV on “Total sales”.
That’s why the two figures differ. “Total sales” includes post-order adjustments such as returns, taxes and shipping, while Shopify’s AOV uses gross sales minus discounts and ignores those later changes.
To calculate it manually, use the “Gross sales” and “Discounts” figures from your sales reports, not “Total sales”.
Shopify shows an Average order value card in Analytics. To look at AOV over longer periods or spot trends, open the “Average order value over time” report and change the time grouping to suit the period you want to compare.
A “good” AOV depends on your store. Where is your audience located? What do you sell? Do you sell small, frequently bought items or larger, occasional purchases? Each of these significantly changes what a healthy AOV looks like.
For a starting point, here are benchmark AOVs from Dynamic Yield as of October 2024:
For a deeper breakdown, see our guide to average order value by industry.
If your AOV is well below these figures, don’t panic. Purchase sizes and frequency vary hugely between stores, so the most useful benchmark is your own AOV tracked over time.
AOV is a great metric, especially tracked over time. But it’s one piece of a bigger puzzle, and very high or very low orders can skew it.
Focus on AOV alone and you can miss other crucial metrics. Here are three worth tracking alongside it in Shopify.
One large order spikes your AOV, but what if that customer never comes back? Retention is what keeps a Shopify store sustainable.
Repeat purchase rate (RPR) shows the percentage of customers who return to buy again:
RPR = (Customers who have made repeat purchases / Total customers) x 100
In Shopify, this metric is called “Returning customer rate”. The calculation is the same. For strategies to improve it, see our guide to increasing repeat customer rate.
Customer lifetime value is harder to measure precisely, but it gives a bigger picture of loyalty and helps you segment customers.
CLV = (Average order value x Purchase frequency) x Average customer lifespan
This formula is tricky for Shopify merchants because Shopify doesn’t have a simple metric tile for it, and average customer lifespan is hard to pin down.
Read more: Ecommerce CLV: how to calculate and improve it
Customer retention rate (CRR) is easy to confuse with repeat purchase rate. CRR measures how many of the customers you had at the start of a period you kept by the end of it, excluding new customers gained in between.
CRR = ((Customers at end of period – New customers during period) / Customers at start of period) x 100
For example, a store starts the quarter with 300 customers, ends it with 310, and gained 40 new customers along the way:
((310 – 40) / 300) x 100 = 90% CRR
In Shopify, Customer cohort analysis gives you a similar view by grouping customers by first purchase date and showing how many return over time. You can also use the Customers over time report to find new and returning customers in a period.
Here are four proven tactics to increase AOV in your Shopify store:
Each tactic can lift AOV, but a loyalty program is the strongest long-term option because it changes behavior across every future order, not just one.
Loyalty programs are one of the most reliable ways to increase AOV. Here’s how, and why.
The clearest evidence is in what members spend compared with everyone else. Across LoyaltyLion brands:
Loyalty programs, like the ones you can build with LoyaltyLion, generate a huge amount of zero-party data: reward redemption rates, purchase frequency, time to second purchase, customer lifetime value and more.
For AOV, loyalty program data shows you which customers are loyal, which are at risk, and which have churned and could be won back.
You can then use those segments to send targeted loyalty emails, or connect email and SMS tools like Klaviyo and Attentive, to encourage customers to return and spend more.
The Organic Butchery (formerly Coombe Farm Organic) is a great example. Even with a relatively simple points-based program, the team used loyalty data to build loyalty-specific email sequences that achieved a 30% click rate, driving that 70% increase in loyalty-related spending.
A tiered loyalty program gives customers better, more exclusive rewards the more loyal they are. Spending over a set amount moves a customer into the next tier, unlocking perks such as giveaways or more points per dollar.
Tiers tap into customers’ desire to rise to a challenge and to belong to an exclusive group. Both naturally lead to higher spending and higher AOV.
That’s exactly what Pulse Boutique found: its tiered program, focused on long-term customer relationships, delivered the 19% AOV increase above.
Shopify calculates AOV as gross sales minus discounts, divided by the number of orders. Both figures exclude adjustments, such as edits, exchanges or returns made after the order was created.
It depends on your industry, price points and region. Benchmarks range from around $70 in beauty and personal care to over $250 in luxury and home categories. Your own AOV trend over time is the most useful benchmark.
Total sales includes post-order adjustments such as returns, taxes and shipping. Shopify’s AOV uses gross sales minus discounts and excludes those adjustments, so the two figures rarely match.
Free shipping thresholds and bundles give quick wins. For lasting growth, a loyalty program with tiers rewards customers for spending more on every order.
You now know how Shopify calculates AOV, how to benchmark it, and how to improve it, including with a loyalty program.
Not all loyalty platforms are the same, so compare providers on the features you need, scalability, ease of use, integrations and cost.
LoyaltyLion is built exclusively for Shopify and takes full advantage of its capabilities.
Ready to explore your options? Take a product tour of LoyaltyLion, or book a demo with our team.
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